Succession planning is an essential part of any corporation’s operations, and the role of CEO is integral to succession planning success.
However, as Elena Lytkina Botelho, Shoma Chatterjee Hayden, and BJ Wright point out in an article for Harvard Business Review, many companies fail to properly plan for their CEOs’ succession. This can have serious consequences for companies, as it can leave them scrambling to find replacements when their current CEOs step down or retire. Let’s look at why CEO succession planning is so important and how companies can ensure they have the right person in place to take over when the time comes.
Identifying Potential Successors
Creating a successful succession plan requires careful consideration and planning from both current and potential CEOs. Companies should begin by assessing their current leadership team to determine which members may have the necessary skill sets and experience to lead the company into the future. This assessment should consider not only technical skills but also soft skills such as emotional intelligence and communication and decision-making abilities.
In addition, companies may wish to identify external talent if current leaders don’t have the requisite knowledge, skills, and competencies to step into the top role. Some skills gaps may be so great that training and development may not be an option. In other cases, training and development can help prepare potential internal candidates.
Training and Development
When potential internal successors have been identified, companies must create development plans that focus on mentorship opportunities and fostering strong relationships between potential successors and current executives.
Additionally, creating ongoing training programs will ensure that potential successors are ready to step into their new roles when needed. Finally, companies should set up regular review meetings with all stakeholders involved to track progress toward goals set out in the development plans.
Proper succession planning is an essential part of any corporation’s operations. Without it, companies risk being left without appropriate leadership when it’s needed most. By taking proactive steps such as assessing current leaders for suitability as potential successors, creating development plans focused on mentorship opportunities, and implementing ongoing training programs, companies make sure the right person is in place to take the reins when needed.
Doing so will provide stability during times of transition, allowing corporations to continue running smoothly even during periods of change at top levels of management.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.